Time for Canada to get Serious on Metals Recycling – by Paul Stothart

Paul Stothart is vice-president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues. This article was published in November, 2010.

As a consequence of its fundamental role (such as turning rock into 99.99% pure metal), the Canadian and global mining industry faces a range of environmental challenges relating to water use, tailings management, air emissions and energy efficiency, among others. And, as a consequence of its global presence and importance in developing countries, the sector faces a range of social issues – Aboriginal relations, community engagement, social and health investments, and others. 

On these two inter-related themes, there is no shortage of demands placed upon the mining industry. In assuming its responsibilities, the industry invests heavily in schools, roads, hospitals, clinics and nutrition programs, among other initiatives, and adheres to numerous standards and protocols in addition to host government laws and regulations. One MAC member company has reported fully 15 codes and protocols that guide its global practice in the area of corporate social responsibility. These actions and investments are for the betterment of Canadian and global society, just as the products themselves, as built from minerals and metals, contribute to an improved quality of life. 

However, one socio-environmental area that does not receive sufficient attention in Canada, and where Canada arguably lags Europe, China and other regions, relates to the recycling of metals. Continue Reading →

Not another wimp out [Comparisons to Brazilian Takeover of Inco] – by Martin Goldfarb (Toronto Star-April 18, 2011)

The Toronto Star, which is the largest circulation newspaper in the country, has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion.

Martin Goldfarb is principal at Goldfarb Intelligence Marketing and was official Liberal party pollster from 1972 to 1984.

Inco is an example worth remembering. At one point Inco was
a global leader, dominating a mining category. It was the soul
of the city of Sudbury and added stature to Ontario. It produced
intellectual property in the mining industry that was second to
none and respected globally. It provided work to miners, engineers, lawyers, bankers and others. So much of this was lost. The intellectual property and pride that Inco brought to Canada,
Ontario and Sudbury are all but gone. What happened? Management ceased to lead. In so doing it became vulnerable to takeover. (Martin Goldfarb-April 18, 2011)

Australia said No to Singapore. Australia decided its stock exchange is not for sale. Now we in Canada are thinking about whether or not the Toronto Stock Exchange (TSX) should be taken over by the London Stock Exchange (LSE).

A country is more than a business. There are totems in our country that define our personality, help create our character and engender pride, independence and a sense of our own charisma. Some arise from our geography (the Rockies, the Arctic), some from our natural resources (oil, water, lumber, maple syrup) and some from government (national health care). All help give us a sense of who we are.

But there are other totems in Canada that are not a function of our geography, our geology or our government. These are institutions created by the citizens of our country in business and academia — our universities and our internationally recognized businesses, such as RIM today, and in the past, Inco and Falconbridge. Inco and Falconbridge have disappeared but should never have been allowed to do so. A dose of economic nationalism is good for our soul. In some circumstances, profit should be second to the national interest. National interests help define who we are. Continue Reading →

A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 3 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

Discussion

Reputation

Public perception of Vale has changed dramatically since 2006. There is mistrust and suspicion surrounding the company’s motives and future plans for the Sudbury operations. Actions and decisions made during the 11 month strike have tarnished Vale’s reputation not only in the Sudbury area, but province-wide, and possibly internationally. Unions from across the world weighed in on the labor dispute. In January 2010, the trade magazine Metal Bulletin described Vale’s hard line as an attempt to break the union.

Reputation matters. Reputation impacts a wide variety of areas: consumer purchasing decisions, employee recruitment and retention, investment decisions, even how media covers your news [40]. From an outsider’s point of view, Vale does not seem very concerned with its reputation, choosing to place profits ahead of its people.

USWA Local 6500 also needs to rebuild and revamp its reputation. Given the lack of community support received during the strike, the actions of certain members, and the harsh and hateful words spoken during the dispute, the union has a long road ahead of it if it is to restore its reputation to where it was prior to the strike. Continue Reading →

A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 2 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

USWA Local 6500

The executive of USWA Local 6500 anticipated difficult negotiations from the start. This was a new company and the negotiating team did not know what to expect. The only thing that was clear was that there would be no concessions on the part of the union.

Talks collapsed mere weeks after they began and the gloves came off shortly thereafter with both sides blaming the other for the impasse [23]. It was at this time that the USWA Local 6500 first alleged that the root cause of the problem was a lack of understanding by Vale’s Brazilian owners as to North American culture, along with a desire to trample workers’ rights and reduce their compensation package [23].

As the months wore on, the USWA Local 6500 web page featured alleged replacement workers, providing names and addresses as well as photos of the individuals. Anonymous members posted that there should be retaliation toward these so-called “scabs”. This resulted in a flurry of threats, assaults and damage to property throughout the community. In May 2010, Vale fired nine strikers for purported violations of its code of conduct on the picket line. There were also criminal charges laid against some of the nine strikers for other offences related to the strike. The matter is still before the Ontario Labor Relations Board and the courts. Continue Reading →

A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 1 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

Final Case Study

Abstract

In July 2009, USWA Local 6500, the union representing the employees of Vale’s Sudbury operations went on strike. This was to become the longest and most acrimonious strike in Sudbury mining history. Both sides in the dispute were responsible for less than flattering behavior, including leaking of documents, bullying, making racist comments, and even criminal activity. The final result of this strike is a community that has lost respect for both organizations.

This case study offers an opportunity to study how actions taken during a strike impact on the reputation of both parties. It also highlights the communication breakdown between not only both parties but also with their key stakeholders.

Overview

“We are very happy with the results of the ratification vote. The agreement establishes a newworking relationship with our employees and the union and allows us to move forward with our long-term, sustainable growth plans. We look forward to returning to normal production andbuilding the future together with employees.”

Tito Martins, Vale’s Executive Director for Base Metals
Vale news release, July 9, 2010 [1] Continue Reading →

South Africa the unlikely new kid on the BRIC block- by Geoffrey York (Globe and Mail-April 14, 2011)

 The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media.

Mr. Zuma could scarcely conceal his exuberance as he expressed his gratitude to the Chinese leaders who had invited South Africa to join the BRIC group. But his presence at the summit is as much about politics as it is business. The club that invited him is increasingly positioning itself as a counterweight to the Western economies, and it needed to recruit an African member, no matter how small it might be on the global stage.

Economically, the BRIC group is already a success. The BRIC economies have grown so dramatically in the past few years that they could overtake the combined size of the G7 nations – the Western-dominated group of economies – within the next decade. Two of the four BRIC founders, China and Brazil, are now ranked among the world’s five biggest economies, with China overtaking Japan last year to rank behind only the United States in size.

Why, then, did they invite the world’s 27th-biggest economy to join their club? Jim O’Neill, the Goldman Sachs economist who coined the “BRIC” term in a 2001 research paper, said he is baffled by the decision to invite South Africa into the group. Other countries in the emerging world – including Indonesia, Mexico, Turkey and South Korea – are much bigger than South Africa, he noted. “It is tough to see how South Africa matches up to these four countries, never mind the BRIC countries,” he wrote in an early assessment. Continue Reading →

Protect the [mine financing] cluster [Toronto] – by Janet Ecker (National Post-April 14, 2011)

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post section on April 14, 2011.

Janet Ecker is president of the Toronto Financial Services Alliance.

The proposed merger of TMX Group and the London Stock Exchange has provoked uncharacteristicallystrong and diverse reactions within the financial community. Those mixed views were clearly displayed during four days of hearings on the deal before the select committee of the Ontario Legislature. How they will judge the strong arguments for and against the deal in their report later this month is anyone’s guess.

Whatever their verdict, and those of the review processes yet to come, we must remember that Toronto is the global leader in mining and metals financing, with TMX playing a significant role. With or without this deal, all sides agree on the need to retain that leadership.

The Toronto exchange (TSX or TSX Venture) lists nearly six in 10 of the world’s publicly listed mining companies, and last year they raised $17.8billion in equity capital -60% of the world’s total for the sector. Continue Reading →

Aboriginal Owned Junior Miner in holding pattern – by Ian Ross

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. This column was published in the April 2011 issue.

Bending Lake Iron examines site options for processing plant

An Aboriginally-owned mining company still has Atikokan in its sights for an iron ore processing plant despite delays in accessing a former open pit mine.

In mid-February, Bending Lake Iron Group president Henry Wetelainen was hopeful of signing a memorandum of understanding with the Ministry of Natural Resources (MNR) toward advancing their merchant pig iron project in northwestern Ontario.

He was expecting the agreement to be signed by Jan. 31, but nothing has happened yet when contacted in February.

The Thunder Bay company wants to mine iron ore near Ignace and process it into pig iron at the abandoned Steep Rock open pit mine near Atikokan. Continue Reading →

Reform revolt: [Northern Ontario] Opposition to Bill 151 grows – by Ron Grech (The Daily Press- April 13, 2011)

Ron Grech is a reporter for The Daily Press, the city of Timmins newspaper. Contact the writer at  rgrech@thedailypress.ca

During a week when the Ontario professional foresters are gathered in Timmins, the province is taking it on the chin over plans to reform forestry tenure.

Both the Federation of Northern Ontario Municipalities (FONOM) and the Nishnawbe Aski Nation (NAN) issued statements Wednesday condemning the government over Bill 151 — The Ontario Forest Tenure Modernization Act.

The day before that, Timmins-James Bay MPP Gilles Bisson challenged Northern Development, Mines and Forestry Minister Michael Gravelle over what the local MPP felt was a lack of consultation being conducted in Northern Ontario.

The government recently rejected calls for public consultation meetings in the North. Instead, it opted to hold two meetings — both of them in Toronto. Continue Reading →

[Boreal Forest Agreement] First Nations caught in ‘the big (land) squeeze’- Peggy Smith (Thunder Bay Chronicle-Journal-April 9, 2011)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario. This letter to the editor was originally published on April 9, 2011. 

Conservation has become a new form of development and
colonization that further restricts and ignores First
Nation rights to land and a way of life.
(Peggy Smith-Thunder Bay)

I have to disagree with Stephen Kakfwi (Boreal Forest Agreement: It’s Time to Forgive and Move Forward). First Nations in the boreal region of Northern Ontario are not in control of their lands.

The Province of Ontario has long ignored the treaties that First Nations signed over 100 years ago. Those treaties (Robinson-Huron, Robinson-Superior, Treaty 3, Treaty 5 and Treaty 9) were, in First Nations’ view, about sharing lands and resources.

While colonizers got rich on extracting resources from First Nation lands, First Nations were excluded from those benefits and spiralled into poverty and alienation from their lands — up until recently First Nations were not even allowed to cut firewood on Crown land without a permit. Even on federally-owned reserves, historically First Nations had to ask the Minister of Indian Affairs for permission to cut green wood. Continue Reading →

Rare Earths: Critical and Strategic – or the Flavour of the Month? – by Paul Stothart

Paul Stothart is vice-president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues. This article was published in February, 2011.

In political Ottawa, where parliamentarians can be exposed to dozens of different issues in an average week, it is not unusual for policy issues or media stories to acquire profile based on a superficial level of understanding. This has happened in recent months in the mining sphere, for example, where many MPs supported flawed private member’s legislation regarding international activities of mining companies so as to not be perceived as “opposing social progress”. On a broader scale, much of the art of political communications seeks to capitalize on superficiality and is oriented around developing a simple effective message and repeating it time and again. (Mining companies have communications lessons to learn on this front, though that is a subject for another day). 

The same practice of applying simplistic analysis to interesting and complex policy issues may be occurring in the area of rare earths elements (REE), where the subject has acquired a high level of sex appeal among politicians in Europe, in the United States and in Canada in recent months. There are several developments that have contributed to this new heightened profile, although three are particularly relevant:

• First, commentators have become increasingly aware of the fact that China controls a high portion of the supply of the world’s processed rare earth minerals.  While figures may vary among light and heavy REEs, the most commonly cited figure is that China produces 97% of the world’s rare earths.  Continue Reading →

Ontario Northern Growth Plan better than it looks – by David Robinson

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. This column was published in the April 2011 issue.

Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University. drobinson@laurentian.ca 

There is little enthusiasm for the so-called Northern Growth Plan. Public comments are lukewarm. Sudbury Mayor Marianne Matichuk, for example, offered the opinion that it might be good that there isn’t a lot detail, that it leaves room for improvements.

In private, responses range from boredom to outright contempt. In fact, the plan is not really all that bad, though it isn’t actually a plan, of course; rather, it is really a list of guiding principles for the hundreds of sub-departments of the ministries that run Northern Ontario.

They are finally trying to get their act together. Minister of Infrastructure Bob Chiarelli is promising to support a lot of obvious good things and to encourage everyone else to develop real plans based on the principles in “The Plan.” Continue Reading →

Cutting through the fog [Aboriginal, Industry and Environment Relations]- (Thunder Bay Chronicle-Journal editorial – April 10, 2011)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario. This editorial was originally published on April 10, 2011. 

AS the chasm of trust between Aboriginals and the rest of Canada widens, every effort to shrink it deserves encouragement. Two such initiatives have surfaced, and while one remains in play, the other has been batted away.

For decades, relations between conservation groups and the forest industry have been poisoned. Greenpeace banners hung from pulp mill smokestacks vividly portrayed an absence of will and trust.

So when 21 forest companies and nine environmental organizations quietly came up with the Canadian Boreal Forest Agreement last year there was cause for celebration. The pact would regulate forest management practices across 72 million hectares of boreal forest and protect 29 million hectares from development. Continue Reading →

Animosity builds over Ontario forestry legislation – by Ian Ross

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca and this article was posted April 2011.

Hearings on Bill 151 will be held in Toronto, April 11 and 13. These are the final hearings before the legislation goes to third reading. Community and industry rancor continues to build against the McGuinty government over the refusal to stage a final round of consultation meetings in Northern Ontario before a new forestry bill is passed into law.

Hearings on Bill 151 – Ontario’s Forest Tenure Modernization Act — will be held in Toronto, April 11 and 13. These are the final hearings before the legislation goes to third reading.

During a March 30 government standing committee, Algoma-Manitoulin MPP Mike Brown kicked a hornet’s nest when he shot down a recommendation to stage hearings in Pembroke, Timmins, Thunder Bay and Sault Ste. Marie in favour of two days of hearings in Toronto.

The government said delegations from the North can appear in person or make their comments through video conferencing. Continue Reading →

Resource Nationalism: The new global economic rent – by John Lee and Johan Erasmus

John Lee is Executive Director, Tax, Ernst & Young LLP and Johan Erasmus is Senior Manager, Tax, Ernst & Young LLP. This column was orginally published in December 2010.

The global financial crisis led to massive budget deficits as many governments injected cash to their economies by way of massive stimulus packages. At the same time, minimized tax collection during and after economic crisis reduced government revenues dramatically.

The relatively swift rebound of the mining and metals industry attracted the attention of deficit-strapped governments and resulted in the industry becoming an early target to replenish national treasuries.

Our company’s report Business Risks Facing Mining and Metals identifies resource nationalism as the fourth-greatest strategic business risk the sector is facing (up from ninth place in 2009). The report identifies how mineral-rich countries are renewing efforts to ensure that they are extracting sufficient economic rent, including royalties, taxes and duties, for the right of a mining company to exploit their resources.

In some instances, governments are even looking to replace and repair other areas of lost revenue with further imposts on the sector, obtaining a larger share of higher mineral prices. Continue Reading →